All categories

3 years ago

Companies and their auditors have adopted a general rule of thumb that anything under 5% of _______ is considered not material.

Business

1 answer:

nata0808 [166]3 years ago

3 0

Answer:

The answer is net income

Explanation:

Net income is the difference the total revenue generated and the total cost(cost of sales, salaries, electricity etc.)

Materiality: A financial statement is said to material is when its misstatement or omission affects the opinion of its intended users.

Companies and auditors have agreed that anything under 5% of net income is considered not material, meaning any misstatement less than 5% of the net income is not considered to be important to alter the view of the users. In this kind of situation, auditors' opinion on the financial statement will be true and fair.

You might be interested in

The cost of the business process is the sum of the cost of the inputs and the ________.

Helga [31]

Answer:

I believe the answer for your question is A, Cost of the activities. Hope this helped!

4 0

2 years ago

Molly and Craig are the original parties to a contract. Craig is obligated to design a Website for Molly. They subsequently make

kolezko [41]

Answer:

Novation

Explanation:

A novation is an agreement that is made between the two parties. In this, the one-party could take place or we can say the substituting of a new party could be done but the parties could ready for the novation

Here in the given scenario, since the Eric takes the place of Craig and its rights and duties are now with Eric

So this situation represents the novation agreement

6 0

3 years ago

When a firm uses K units of capital and L units of labor, it can produce Q units of output with the production function Q = K√L.

DanielleElmas [232]

Answer:

$STC = 20K + 25L = 20*5 + 25*[\frac{Q^2}{25}] = 100 + Q^2$

Explanation:

We are given:

K units of capital and L units of labor.

•Each unit of capital cost = 20

• Each unit of labor cost =25

• Level K is fixed at 5 units

We are told production function Q = K√L

Using the production functions and the values given, we can get that Q=5√L.

To find Q, the amount of labor will be given as:

$L = \frac{Q^2}{25}$

Therefore, the Short run total cost function (STC) will be:

$20K + 25L = 20*5 + 25[\frac{Q^2}{25}] = 100 + Q^2$

7 0

3 years ago

On December 1, Orenthal Marketing Company received $3,600 from a customer for a 2-month marketing plan to be completed January 3

Ilya [14]

Answer:

a.a debit to Unearned Fees for $1,800

Explanation:

The adjusting entry is shown below:

Unearned fees A/c Dr $1,800

To Earned fees A/c $1,800

(Being the unearned fees is recorded)

The computation is shown below:

= Received amount × number of months ÷ given months

= $3,600 × 1 months ÷ 2 months

= $1,800

We simply debited the unearned fees and credited the earned fees account for $1,800

4 0

3 years ago

Brittany Callihan sold stock (basis of $184,000) to her son, Ridge, for $160,000, the fair market value. a. What are the tax con

ycow [4]

Answer:

(a) Brittany loss due to taxes = Basis - fair market value

= $184,000 - $160,000

= $24,000

Therefore, Brittany will have a $24,000 loss that is not deductible.

(b) Tax consequences to Ridge if he later sells the stock for $190,000 are as follows:

Realized gain = $30,000 and Recognized as a gain for tax payers = $6,000

Realized and recognized loss = $8,000
There is no recognized gain for Ridge and unrecognized loss of $10,000. It is permanent lost.

6 0

3 years ago